one of our client imports crude oil from singapore...in the month of march 2011 co. purchase oil from singapore .....such vessel carrying oil reach india custom port in april 2011 & then co. filed bill of entry & pay cutom duty.....plz tell in which F/Y to treat such purchase as PURCHASE IMPORT IN BOOKS i.e in 2010-11 OR 2011-12......plz provide with case law if any........
plz answer......
in my view it should be taken as purchase in the year 2010-11 and in balance sheet it should be treated as goods in transit
rectify me if i am wrong
my view is also same ........but plz provide me with any case law on same fact. if any
fi payment of bills for goods are made in march, then only consider the goods in transit,
as the goods are not duty paid so the value addition will take place at customs point, so its better to book the purchase af the point of customs clearance, otherwise it will make lots of accounting complications to add the valuation,.
For me you should follow the procedure which your company follows.
It wont make any difference, how u treat it. even if u take it as purchase then the same will be taken as closing stock - no impact on profits.
If you dont book the same there will be no impact on profits....
But wait for any case laws suggested by our CA Club members.
| Originally posted by : jignesh mehta | ||
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For me you should follow the procedure which your company follows. It wont make any difference, how u treat it. even if u take it as purchase then the same will be taken as closing stock - no impact on profits. If you dont book the same there will be no impact on profits.... But wait for any case laws suggested by our CA Club members. |
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Nice reply.....
but tt should be taken for FY 2010-2011, because purchased has been made in March.
i think it depends on contract. If it is a FOB purchase then it ca be booked in March.
but if it is CIF purchase then it should be booked in April.
agreed with aman sir
It should go in FY 2011-12 my accounting purpose B.E is important. once the material reach in boundries of customs then it is import and u have to make it form FY 11-12
Dear chetan ji
when goods comes into the custom barriers of india it will be treated as an import it is true but it is not related for booking of purchase .
According to Mr. Amanpreet it will be booked according to contract , because transfer of ownership & risk is also most important aspect
hey i have done a lot of audit work in purchase and sales area in my articleship time. what i have learned is the following,
1-most imp which party has taken the responsibility of delivery to indian port????? If indian party then no doubt it will be booked in 10-11 but if the other party then move on to next point
2-did the goods reach indian water by 31st march??? if yes then even if the goods are not docked purchase should be booked 10-11--have not reached indian water then it can be booked in next year.
my best bet is book it in 10-11 on provisional basis to consider the prudency aspect and most imptly consider it for closing stock.
KB
on the basis of accural concept.
it should be booked in march itself.
being the date of invoice
| Originally posted by : Rajnikant Vadigoppula | ||
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on the basis of accural concept. it should be booked in march itself. being the date of invoice |
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AGREED.
when goods are cleared from the customes on that date we will record purchase in our book this method is adopted by many orgaisation but it also differs in many but in general it is don like this
according to your quisetion bill of entry in April so according me it should be taken in Financial year 2010-2011
CAclubindia
